Policy watch: Towards a New Deal

The business of banking is no more mysterious than any other business sector and Roosevelt realised this. Needs must, the market devil will out

Two factors are driving Fine Gael towards a statist “New Deal” solution to Ireland’s unemployment problem. First, Irish banks are not yet fit for purpose and will not lend. Second, the state does not have access to extra development capital at commercial rates.

As a result, the party’s newERA policy, which hopes to create 105,000 jobs, is to be funded from a variety of sources.

Direct exchequer funds and the remaining cash held in the National Pensions Reserve Fund (NPRF) would be used. In addition, money from a new “national recovery bond” and the European Investment Bank would be required. Existing state enterprises would have to be leveraged via new bond issues, and non-strategic state assets would be sold.

In total, this would raise €18 billion for job creation. The idea of driving future development through a state industrial holding company, with five state-owned subsidiaries focused on electricity, gas, water,